of my classmates classified Apple as Level 3 shaper but if you consider the music streaming business segment of
apple i.e. Apple Music, you can see that its clearly operating in Level 3 adapter. According to our text, Adapters
are companies that take current industry structure as a given and positions
themselves for competitive advantage within current structure (Kluyver and
streaming music industry was truly shaped by Spotify which was first launched
in 2008 and then introduced a subscription based model in 2011. “For the first time since Napster decimated music sales, the
recorded-music industry is showing signs of growth, and that reversal of
fortune is largely due to one man: Spotify chairman/CEO Daniel Ek. In 2016,
streaming accounted for 51 percent of music consumption in the United States,
and Spotify dominated the category. The company is adding subscribers faster
than Apple, to the point that it now accounts for 43 percent of paid
subscribers worldwide” (Levine 2017).
cautiously waited for the industry to develop into its current subscription
based form, crafted the strategy as opportunities emerged and then jumped into
the market with its competitive advantage of a brand name and loyal fanbase.
Apple will be entering a market where others, including Spotify, Deezer and
Rhapsody, have already taken root among some of the most active music consumers
but with Apple’s sheer size and reach — it has sold over 700 million iPhones
alone — gives the company an advantage over every other player, and may allow
it to dominate a fast-growing market (Sisario 2015).
the end of 2016, Apple Music has 20.9 million paid users and Spotify has 43
million (Nicolaou 2017). The US music industry revenue continues to bounce back
with wholesale revenue of $2.7 billion – paid music streaming industry is its
largest contributor with 62%. As this business segment represent enormous
revenue generating opportunities, Apple Music is a big part of Apple’s growing
services business, both now and in the future. The Mac maker is ambitiously
targeting $50 billion in services revenue by 2020, with Apple Music being a key
driver of that growth (Niu 2017).